Several millions of dollars are lost every year as a result of Lost-and-unaccounted-for-gas (“LAUF”). LAUF is determined by calculating the difference between the amount of gas purchased by a purchaser and the amount of gas sold. LAUF represents a major source of overhead in the gas distribution business, and this is true across geographies.
LAUF has several causes including unauthorized consumption, faulty equipment (including meters and volume correctors), storage and withdrawal adjustments, billing errors (particularly wherever manual billing is applicable), and others.
Every company involved in the gas industry must deal with the issues associated with and cost of LAUF. This is true for production, gathering, midstream, pipeline, and distribution companies which are all impacted by and must account for LAUF gas loss. Traditionally, the cost and impact of LUAF is passed directly to the customer. More recently, gas industry companies have taken steps to manage the impact of LUAF on their customers.
Federal Energy Regulatory Commission Order 636 (promulgated in 1993) required pipeline companies to manage LAUF. Additionally, the price of natural gas and other fossil fuels experiences significant volatility. In combination, these factors, and others, underscore the need for natural gas energy companies to increasingly mitigate the effects of LAUF, regardless of where they fall on the energy value chain: production, gathering, processing plant, pipeline, and/or local distribution segment.
Metering devices and related errors account for a significant portion of LAUF. Such errors alone have likely resulted in hundreds of millions of dollars in losses in North America alone and losses similar in scope exist worldwide. Such losses have increased over time and are expected to continue to increase.
Metering devices with moving parts (e.g., turbine meters, rotary meters, and pressure regulators) are some of the items that are most impacted by aging and wear and tear.
Accordingly, a cost effective early warning system that provides an alert of an upcoming device failure would provide added value to energy companies. Given the extraordinary costs associated with faulty gas delivery monitoring equipment, methods and systems for identifying and reducing malfunctioning monitoring equipment is needed.